RERA may cause a temporary slowdown but Macquarie maintains Outperform on HDFC

Macquarie maintains an outperform call on HDFC with a target price of Rs1890 which translates into a return of little over 7c percent from current levels.

The Real Estate (Regulation and Development) Act (RERA) may cause a temporary slowdown in the mortgage business, according to management but the future outlook looks robust.

The management expects the loan growth of 15 percent in core mortgage business. IPOs of the life insurance and AMC is likely in 3-6 months. The life-insurance business will most probably be listed in Q3FY18.

The warrant conversion to yield Rs 5,000 crore and add 180 bps to Tier-1 ratio of 12 percent, said the Macquarie note.